This year brought many changes to condo lending which has led to questions and confusion:

Buyers ask: ‘what type of financing is available to me?’
Sellers ask: ‘how do I get my home sold?’
REALTORS ask: ‘how can I best market this condo?’

So buyers before you consider putting a contract on a condo and agents before you decide to take a listing, consider these questions.

1. Is the condo an existing project or new project? – If Less than 90% of the units in a complex have sold once – the project is considered new; there are significant restrictions for financing new condo developments (see a professional lenders advice)
2. Has the condo board been turned over to the owners?  If not this is an issue
3. Are more than 30% of the total units in the condo development being rented?  If more than 30% then no MI Company will write a policy on the property.  FHA will allow up to 50% rentals.
4. Are more than 15% of the HOA dues behind 30-days or more? If so this is an issue and will preclude financing – this includes Fannie Mae Limited Review.
5. Does Any Single Entity own more than 10% of the units?  If so this will disqualify the project.
6. Does the project have adequate reserves for maintenance?  Adequate reserves will (1) include allocations/line items to ensure sufficient funds are available to maintain and preserve all amenities and features unique to the condominium project; (2) provide for the funding of replacement reserves for capital expenditures and deferred maintenance in an account representing at least 10% of the budget; and (3) provide adequate funding for insurance coverage and deductibles.
7. Is liability insurance in place providing at least $l Million of coverage for bodily injury and property damage per-occurrence?  This is required
8. Is hazard insurance in place to cover 100% of the insurable replacement cost of the project improvements, including the individual units? (The deductible amount must not exceed 5% of the policy’s face amount). Required

And as always if you have specific questions, ask me – I’m here to help

Quite simply my clients and the mortgage industry are my passion.

Mortgages matter because for most people they represent their largest asset and their largest liability. Consequently, it’s imperative to give them the time, attention and expertise needed to ensure yours is the right loan. The right loan is one that’s a good long term strategy.  One that meets the immediate goal of purchasing or refinancing a house and is still a smart choice years from now.

I’ll often say that ‘mortgage bankers aren’t boring people, they’re just people who get excited about boring things’. Let me be that advisor for you – the person that gets excited about your mortgage.

Rebecca R. Madej, NMLS# 91445
Mortgage Consultant

Cunningham & Company Mortgage Bankers
2101 Rexford Road, Suite 131E
Charlotte, NC 28211

Office: 704.366.7711
Mobile: 704.488.8883
Fax: 704.366.8822
Toll Free: 800.251.5534

www.rebeccamadej.com

remarkable service | exceptional results